NESTLE PHILIPPINES, INC. V. PUEDAN

G.R. No. 220617. January 30, 2017.*
 
NESTLÉ PHILIPPINES, INC., petitioner,   vs.   BENNY A. PUEDAN, JR., JAYFER D. LIMBO,
BRODNEY N. AVILA, ARTHUR C. AQUINO, RYAN A. MIRANDA, RONALD R. ALAVE, JOHNNY
A. DIMAYA, MARLON B. DELOS REYES, ANGELITO R. CORDOVA, EDGAR S. BARRUGA,
CAMILO B. CORDOVA, JR., JEFFRY B. LANGUISAN, EDISON U. VILLAPANDO, JHEIRNEY S.
REMOLIN, MARY LUZ A. MACATALAD,**   JENALYN M. GAMUROT, DENNIS G. BAWAG,
RAQUEL A. ABELLERA, and RICANDRO G. GUATNO, JR., respondents.
Labor Disputes; Grave Abuse of Discretion; In labor disputes, grave abuse of discretion may be
ascribed to the National Labor Relations Commission (NLRC) when, inter alia, its findings and
conclusions are not supported by substantial evidence, or that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.—To justify the grant of the
extraordinary remedy of certiorari, the petitioner must satisfactorily show that the court or quasi-judicial
authority gravely abused the discretion conferred upon it. Grave abuse of discretion connotes a capricious
and whimsical exercise of judgment, done in a despotic manner by reason of passion or personal hostility,
the character of which being so patent and gross as to amount to an evasion of positive duty or to a virtual
refusal to perform the duty enjoined by or to act at all in contemplation of law. In labor disputes, grave
abuse of discretion may be ascribed to the NLRC when, inter alia, its findings and conclusions are not
supported by substantial evidence, or that amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion.
Due Process; Administrative Due Process; Administrative due process cannot be fully equated with
due process in its strict judicial sense, for in the former a formal or trial type hearing is not always
_______________

*  FIRST DIVISION.
** “Nacatalad” in some parts of the Records.
 
 
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necessary, and technical rules of procedure are not strictly applied.—The observance of fairness in
the conduct of any investigation is at the very heart of procedural due process. The essence of due process
is to be heard, and, as applied to administrative proceedings, this means a fair and reasonable opportunity
to explain one’s side, or an opportunity to seek a reconsideration of the action or ruling complained of.
Administrative due process cannot be fully equated with due process in its strict judicial sense, for in the
former a formal or trial type hearing is not always necessary, and technical rules of procedure are not
strictly applied.
Same; Same; In Autencio v. Mañara, 449 SCRA 46 (2005), it was held that defects in procedural
due process may be cured when the party has been afforded the opportunity to appeal or to seek
reconsideration of the action or ruling complained of.—Assuming arguendo that NPI was somehow
deprived of due process by either of the labor tribunals, such defect was cured by: (a) NPI’s filing of its
motion for reconsideration before the NLRC; (b) the NLRC’s subsequent issuance of its Resolution dated
August 30, 2013 wherein the tribunal considered all of NPI’s arguments as contained in its motion; and
(c) NPI’s subsequent elevation of the case to the CA. In Gonzales v. Civil Service Commission, 490 SCRA
741 (2006), the Court reiterated the rule that “[a]ny seeming defect in [the] observance [of due process] is
cured by the filing of a motion for reconsideration,” and that “denial of due process cannot be successfully
invoked by a party who [was] afforded the opportunity to be heard x x x.” Similarly, in Autencio v.
Mañara, 449 SCRA 46 (2005), it was held that defects in procedural due process may be cured when the
party has been afforded the opportunity to appeal or to seek reconsideration of the action or ruling
complained of.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
   Viesca, Dones & Malang Law Offices for petitioner.
   Cristeta D. Tamayo for respondents.
 
 
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PERLAS-BERNABE, J.:
 
Assailed in this petition for review on certiorari1  are the Decision2  dated March 26, 2015 and the
Resolution3 dated September 17, 2015 of the Court of Appeals (CA) in C.A.-G.R. S.P. No. 132686, which
affirmed the Decision4  dated May 30, 2013 and the Resolution5  dated August 30, 2013 of the National
Labor Relations Commission (NLRC) in LAC No. 02-000699-13/NCR-03-04761-12, declaring petitioner
Nestlé Philippines, Inc. (NPI), jointly and severally liable with Ocho de Septiembre, Inc. (ODSI) to
respondents Benny A. Puedan, Jr., Jayfer D. Limbo, Brodney N. Avila, Arthur C. Aquino, Ryan A.
Miranda, Ronald R. Alave, Johnny A. Dimaya, Marlon B. Delos Reyes, Angelita R. Cordova, Edgar S.
Barruga, Camilo B. Cordova, Jr., Jeffry B. Languisan, Edison U. Villapando, Jheirney S. Remolin, Mary
Luz A. Macatalad, Jenalyn M. Gamurot, Dennis G. Bawag, Raquel A. Abellera, and Ricandro G. Guatno,
Jr. (respondents) for separation pay, nominal damages, and attorney’s fees.
 
The Facts
 
 The instant case arose from an amended6   complaint7   dated July 6, 2012 for illegal dismissal,
damages, and attorney’s fees filed by respondents against, inter alia, ODSI and NPI.
_______________

1  Rollo, pp. 10-35.

2  Id., at pp. 39-51. Penned by Associate Justice Agnes Reyes-Carpio, with Associate Justices Rosmari
D. Carandang and Romeo F. Barza, concurring.
3  Id., at pp. 53-54.
4  Id., at pp. 86-99. Penned by Commissioner Nieves E. Vivar-De Castro, with Commissioners Joseph
Gerard E. Mabilog and Isabel G. Panganiban-Ortiguerra, concurring.
5  Id., at pp. 101-112.
6  Said complaint was amended to include NPI as one of the respondents therein; id., at pp. 234 and
245.
7  Id., at pp. 152-156.
 
 
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Respondents alleged that on various dates, ODSI and NPI hired them to sell various NPI products in the
assigned covered area. After some time, respondents demanded that they be considered regular employees
of NPI, but they were directed to sign contracts of employment with ODSI instead. When respondents
refused to comply with such directives, NPI and ODSI terminated them from their position.8  Thus, they
were constrained to file the complaint, claiming that: (a) ODSI is a labor-only contractor and, thus, they
should be deemed regular employees of NPI; and (b) there was no just or authorized cause for their
dismissal.9
For its part, ODSI averred that it is a company engaged in the business of buying, selling,
distributing, and marketing of goods and commodities of every kind and it enters into all kinds of
contracts for the acquisition thereof. ODSI admitted that on various dates, it hired respondents as its
employees and assigned them to execute the Distributorship Agreement10   it entered with NPI,11   the
relevant portions of which state:
3.1 DISTRIBUTOR (ODSI) shall assign a sales force in his/her regular employ, dedicated solely to the
handling of NPI Grocery Retail Products under this Agreement, and who shall exclusively cover
assigned areas/channels of distribution.
3.2 DISTRIBUTOR shall service the outlets within the Territory by reselling Products obtained
exclusively from Nestlé Philippines, Inc. and not from any other source.
3.3 DISTRIBUTOR shall utilize booking and distribution salesmen to undertake territory development.
Booking done by DISTRIBUTOR shall be delivered
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 8   Id., at p. 159.
9   Id., at p. 40.
10   ODSI entered into the Distributorship Agreement with NPI when the former was still named
“Service Edge Distribution, Inc.” Id., at pp. 127-139.
11  Id., at p. 40.
 
 
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by its personnel. Collection of accounts shall be taken cared (sic) of by DISTRIBUTOR, without
prejudice to the provisions of Clause 13 hereof.
3.4 DISTRIBUTOR’s route salesmen shall exclusively cover assigned ex-truck areas/channels of
distribution.
3.5 DISTRIBUTOR shall also provide training to its staff or personnel where necessary, to improve
operations in servicing the requirements of DISTRIBUTOR’s customers. From time to time,
NESTLÉ shall offer to DISTRIBUTOR suggestions and recommendations to improve sales and to
further develop the market.
3.6 DISTRIBUTOR shall meet the sales, reach and distribution targets agreed upon by NESTLÉ and
DISTRIBUTOR. For purposes of this clause, reach targets refer to the number of stores, dealers and/
or outlets which DISTRIBUTOR should cover or service within a particular period. Distribution
targets refer to the number of stock keeping units and/or product lines covered by this Agreement.
In the event of DISTRIBUTOR’s failure to meet NESTLÉ’s sales targets, NESTLÉ has the sole
discretion of assigning another distributor of the Products and/or reducing the Territory covered by
DISTRIBUTOR.
3.7 DISTRIBUTOR agrees to provide at its own cost and expense facilities and other resources necessary
for the distribution and sale of the Products.
3.8 NESTLÉ’s sales personnel may get orders for the Products distributed by DISTRIBUTOR and pass
on the said orders to DISTRIBUTOR.
3.9 NESTLÉ shall provide the necessary promotional and marketing support for the Products through
promotional materials, product information literature, participation in trade fairs, and other market
development activities.
 
 
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3.10 Should NESTLÉ manufacture and/or distribute other products not subject of this Agreement, which,
in NESTLÉ’s opinion, should likewise be extended to DISTRIBUTOR’s outlets, such additional
products shall be included among those listed in Annex “A” hereof.
NESTLÉ shall deliver the Products to DISTRIBUTOR’s warehouse(s) at its own expenses.
Immediately upon receipt of the Products, DISTRIBUTOR shall carry out a visual inspection thereof.
In the event any quantity of the Products is found to be defective upon such visual inspection,
NESTLÉ shall replace such quantity of the Products at no cost to DISTRIBUTOR.
3.11 All costs for transportation and/or shipment of the Products from DISTRIBUTOR’s warehouse(s) to
its outlets/customers shall be the account of the DISTRIBUTOR.12
 
However, the business relationship between NPI and ODSI turned sour when the former’s sales
department badgered the latter regarding the sales targets. Eventually, NPI downsized its marketing and
promotional support from ODSI which resulted to business reverses and in the latter’s filing of a petition
for corporate rehabilitation and, subsequently, the closure of its Nestlé unit due to the termination of the
Distributorship Agreement and the failure of rehabilitation. Under the foregoing circumstances, ODSI
argued that respondents were not dismissed but merely put in floating status.13
On the other hand, NPI did not file any position paper or appear in the scheduled conferences.14
_______________

12  Id., at pp. 128-129.

13  Id., at pp. 41-43.
14  Id., at p. 234.
 
 
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The Labor Arbiter’s Ruling

 
In a Decision  dated December 28, 2012, the Labor Arbiter (LA) dismissed the complaint for lack of
15

merit, but nevertheless, ordered, inter alia, ODSI and NPI to pay respondents nominal damages in the
aggregate amount of P235,728.00 plus attorney’s fees amounting to ten percent (10%) of the total
monetary awards.16   The LA found that: (a) respondents were unable to prove that they were NPI
employees; and (b) respondents were not illegally dismissed as ODSI had indeed closed down its
operations due to business losses.17  As to the issue on the failure to give respondents a thirty (30)-day
notice prior to such closure, the LA concluded that all the impleaded respondents therein (i.e., including
NPI) should be held liable for the payment of nominal damages plus attorney’s fees.18
Aggrieved, respondents appealed to the NLRC.19
 
 The NLRC’s Ruling
 
In a Decision  dated May 30, 2013, the NLRC reversed and set aside the LA ruling and, accordingly,
20

ordered ODSI and NPI to pay each of the respondents: (a) separation pay amounting to 1/2 month pay for
every year of service reckoned from the time they were employed until the finality of the Decision; and
(b) nominal damages in the amount of P30,000.00. The NLRC likewise ordered NPI and ODSI to pay
respondents attorney’s fees amounting to ten percent (10%) of the monetary awards.21
_______________

15  Id., at pp. 228-238. Penned by Labor Arbiter Lilia S. Savari.

16  Id., at pp. 237-238.
17  Id., at pp. 235-236.
18  Id., at p. 236.
19  See Memorandum of Appeal dated January 28, 2013; id., at pp. 241-256.
20  Id., at pp. 86-99.
21  Id., at pp. 97-99.
 
 
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Contrary to the LA’s findings, the NLRC found that while ODSI indeed shut down its operations, it
failed to prove that such closure was due to serious business losses as it did not present evidence, e.g.,
financial statements, to corroborate its claims. As such, it ruled that respondents are entitled to separation
pay. In this relation, the NLRC also found that since ODSI failed to notify respondents of such closure,
the latter are likewise entitled to nominal damages.22
Further, the NLRC found ODSI to be a labor-only contractor of NPI, considering that: (a) ODSI had
no substantial capitalization or investment; (b) respondents performed activities directly related to NPI’s
principal business; and (c) the fact that respondents’ employment depended on the continuous supply of
NPI products shows that ODSI had not been carrying an independent business according to its own
manner and method.23 Consequently, the NLRC deemed NPI to be respondents’ true employer, and thus,
ordered it jointly and severally liable with ODSI to pay the monetary claims of respondents.24
Respondents moved for a partial reconsideration,25  arguing that since it was only ODSI that closed
down operations and not NPI and, considering the finding that the latter was deemed to be their true
employer, NPI should reinstate them, or if not practicable, to pay them separation pay equivalent to one
(1) month pay for every year of service. NPI also moved for reconsideration,26 contending that: (a) it was
deprived of its right to participate in the proceedings before the LA and the NLRC; and (b) it had no
employer-employee relationship with respondents as ODSI was never its contractor, whether inde-
_______________
 22  Id., at pp. 95-96.
23  Id., at pp. 91-92.
24  Id., at pp. 92-93 and 96-97.
25  See Partial Motion for Reconsideration dated June 24, 2013; id., at pp. 272-278.
26  See Motion for Reconsideration dated July 12, 2013; CA Rollo, pp. 61-73.
 
 
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pendent or labor-only.27  However, the NLRC denied both motions in a Resolution28  dated August 30,
2013, holding that: (a) respondents’ termination was due to the closure of ODSI’s Nestlé unit, an
authorized cause and, thus, the monetary awards in their favor were proper; (b) NPI was not deprived of
its right to participate in the proceedings as it was duly served with copies of the parties’ respective
pleadings, as well as the rulings of both the LA and the NLRC; (c) assuming arguendo that NPI was
indeed deprived of due process, its subsequent filing of a motion for reconsideration before the NLRC
cured the defect as it was able to argue its position in the said motion; and (d) the circumstances
surrounding the Distributorship Agreement between ODSI and NPI showed that the former is indeed a
labor-only contractor of the latter.29
Dissatisfied, NPI filed a petition for certiorari30  before the CA, essentially insisting that: (a) it was
deprived of due process before the tribunals a quo; and (b) there was no employer-employee relationship
between NPI and respondents.31 Records reveal that no other party elevated the matter before the CA.
 
The CA’s Ruling
 
In a Decision  dated March 26, 2015, the CA affirmed the NLRC ruling. Anent the issue on due
32

process, the CA held that NPI was not deprived of its opportunity to be heard as it was able to receive a
copy of the complaint and other pleadings, albeit it failed to respond thereto.33 As regards the substantive
issue, the CA ruled that despite ODSI and NPI’s
_______________

27  See Rollo, pp. 102-103.

28  Id., at pp. 101-112.
29  Id., at pp. 103-111.
30  Dated November 15, 2013. Id., at pp. 55-81.
31  Id., at pp. 46-47.
32  Id., at pp. 39-51.
33  Id., at p. 47.
 
  
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contract being denominated as a “Distributorship Agreement,” it contained provisions demonstrating a

labor-only contracting arrangement between them, as well as NPI’s exercise of control over the business
of ODSI. Moreover, the CA pointed out that: (a) there was nothing in the records which showed that
ODSI had substantial capital to undertake an independent business; and (b) respondents performed tasks
essential to NPI’s business.34
Undaunted, NPI moved for reconsideration,35  which was, however, denied in a Resolution36  dated
September 17, 2015; hence, this petition.
 
The Issues Before the Court
 
The essential issues for the Court’s resolution are whether or not the CA correctly ruled that: (a) NPI
was accorded due process by the tribunals a quo; and (b) ODSI is a labor-only contractor of NPI, and
consequently, NPI is respondents’ true employer and, thus, deemed jointly and severally liable with ODSI
for respondents’ monetary claims.
 
The Court’s Ruling
 
To justify the grant of the extraordinary remedy of certiorari, the petitioner must satisfactorily show
that the court or quasi-judicial authority gravely abused the discretion conferred upon it. Grave abuse of
discretion connotes a capricious and whimsical exercise of judgment, done in a despotic manner by
reason of passion or personal hostility, the character of which being so patent and gross as to amount to an
evasion of
_______________

34  Id., at pp. 48-50.

35  See Motion for Reconsideration dated May 6, 2015; id., at pp. 333-349.
36  Id., at pp. 53-54.
 
 
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positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law.
37

In labor disputes, grave abuse of discretion may be ascribed to the NLRC when,   inter alia, its
findings and conclusions are not supported by substantial evidence, or that amount of relevant evidence
which a reasonable mind might accept as adequate to justify a conclusion.38
Guided by the foregoing considerations, the Court finds that the CA was correct in ruling that the
labor tribunals a quo gave NPI an opportunity to be heard. However, it erred in not ascribing grave abuse
of discretion on the NLRC’s finding that ODSI is a labor-only contractor of NPI and, thus, the latter is the
respondents’ true employer, and jointly and severally liable with ODSI for respondents’ monetary claims.
As will be explained hereunder, such finding by the NLRC is not supported by substantial evidence.
 
I.
 
The observance of fairness in the conduct of any investigation is at the very heart of procedural due
process. The essence of due process is to be heard, and, as applied to administrative proceedings, this
means a fair and reasonable opportunity to explain one’s side, or an opportunity to seek a reconsideration
of the action or ruling complained of. Administrative due process cannot be fully equated with due
process in its strict judicial sense, for in the former a formal or trial type hearing is not always necessary,
and technical rules of proce-
_______________

37   See Sta. Isabel v. Perla Campañia de Seguros, Inc., G.R. No. 219430, November 7, 2016, 807
SCRA 162.
38  Id., citation omitted.
 
 
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dure are not strictly applied.39 The Court’s disquisition in Ledesma v. CA40 is instructive on this matter, to
wit:
Due process, as a constitutional precept, does not always and in all situations require a trial-type
proceeding. Due process is satisfied when a person is notified of the charge against him and given an
opportunity to explain or defend himself. In administrative proceedings, the filing of charges and giving
reasonable opportunity for the person so charged to answer the accusations against him constitute the
minimum requirements of due process. The essence of due process is simply to be heard, or as applied
to administrative proceedings, an opportunity to explain one’s side, or an opportunity to seek a
reconsideration of the action or ruling complained of.41 (Emphasis and underscoring supplied)
 
 In this case, NPI essentially claims that it was deprived of its right to due process when it was not
notified of the proceedings before the LA and did not receive copies and issuances from the other parties
and the LA, respectively.42 However, as correctly pointed out by the CA, NPI was furnished via courier of
a copy of the amended complaint filed by the respondents against it as shown by LBC Receipt No.
125158910840.43  It is also apparent that NPI was also furnished with the respondents’ Position Paper,
Reply, and Rejoinder.44  Verily, NPI was indeed accorded due process, but as the LA mentioned, the
former chose not to file any position paper or appear in the scheduled conferences.45
_______________

39  Vivo v. Philippine Amusement and Gaming Corporation (PAGCOR), 721 Phil. 34, 39; 709 SCRA
276, 281-282 (2013), citations omitted.
40  565 Phil. 731; 541 SCRA 444 (2007).
41  Id., at p. 740; pp. 451-452, citations omitted.
42  Rollo, pp. 20-24.
43  Id., at p. 156 and CA Rollo, p. 104.
44  See CA Rollo, pp. 119, 129, and 134.
45  Rollo, p. 234.
 
 
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Assuming arguendo that NPI was somehow deprived of due process by either of the labor tribunals,
such defect was cured by: (a) NPI’s filing of its motion for reconsideration before the NLRC; (b) the
NLRC’s subsequent issuance of its Resolution dated August 30, 2013 wherein the tribunal considered all
of NPI’s arguments as contained in its motion; and (c) NPI’s subsequent elevation of the case to the CA.
In Gonzales v. Civil Service Commission,46 the Court reiterated the rule that “[a]ny seeming defect in [the]
observance [of due process] is cured by the filing of a motion for reconsideration,” and that “denial of due
process cannot be successfully invoked by a party who [was] afforded the opportunity to be heard
x x x.”47  Similarly, in Autencio v. Mañara,48  it was held that defects in procedural due process may be
cured when the party has been afforded the opportunity to appeal or to seek reconsideration of the action
or ruling complained of.49
Evidently, the foregoing shows that NPI was not denied due process of law as it was afforded the fair
and reasonable opportunity to explain its side.
 
II.
 
In holding NPI jointly and severally liable with ODSI for the monetary awards in favor of
respondents, both the NLRC and the CA held that based on the provisions of the Distributorship
Agreement between them, ODSI is merely a labor-only contractor of NPI.50 In this regard, the CA opined
that the following stipulations of the said Agreement evinces that NPI had control over the business of
ODSI, namely, that: (a) NPI shall offer to ODSI suggestions and recommendations to improve sales and
to further develop the market; (b) NPI
_______________

46  524 Phil. 271; 490 SCRA 741 (2006).

47  Id., at p. 278; p. 746.
48  489 Phil. 752; 449 SCRA 46 (2005).
49  Id., at p. 761; pp. 55-56.
50  See Rollo, pp. 48-50 and 91-93.
 
 
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prohibits ODSI from exporting its products (the No-Export provision); (c) NPI provided standard
requirements to ODSI for the warehousing and inventory management of the sold goods; and (d)
prohibition imposed on ODSI to sell any other products that directly compete with those of NPI.51
However, a closer examination of the Distributorship Agreement reveals that the relationship of NPI
and ODSI is not that of a principal and a contractor (regardless of whether labor-only or independent), but
that of a seller and a buyer/reseller. As stipulated in the Distributorship Agreement, NPI agreed to sell its
products to ODSI at discounted prices,52 which in turn will be resold to identified customers, ensuring in
the process the integrity and quality of the said products based on the standards agreed upon by the
parties.53  As aptly explained by NPI, the goods it manufactures are distributed to the market through
various distributors,   e.g., ODSI, that in turn, resell the same to designated outlets through its own
employees such as the respondents. Therefore, the reselling activities allegedly performed by the
respondents properly pertain to ODSI, whose principal business consists of the “buying, selling,
distributing, and marketing goods and commodities of every kind” and “[entering] into all kinds of
contracts for the acquisition of such goods [and commodities].”54
Thus, contrary to the CA’s findings, the aforementioned stipulations in the Distributorship Agreement
hardly demonstrate control on the part of NPI over the means and methods by which ODSI performs its
business, nor were they intended to dictate how ODSI shall conduct its business as a distributor.
Otherwise stated, the stipulations in the Distributorship Agreement do not operate to control or fix the
methodology on how ODSI should do its business as a distributor of NPI
_______________

51  Id., at p. 48.
52  Id., at p. 128.
 53  Id., at pp. 128-129.
54  Id., at p. 40.
 
 
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products, but merely provide rules of conduct or guidelines towards the achievement of a mutually
desired result55 — which in this case is the sale of NPI products to the end consumer. In Steelcase, Inc. v.
Design International Selections, Inc.,56   the Court held that the imposition of minimum standards
concerning sales, marketing, finance and operations are nothing more than an exercise of sound business
practice to increase sales and maximize profits, to wit:
Finally, both the CA and DISI rely heavily on the Dealer Performance Expectation required by
Steelcase of its distributors to prove that DISI was not functioning independently from Steelcase because
the same imposed certain conditions pertaining to business planning, organizational structure, operational
effectiveness and efficiency, and financial stability. It is actually logical to expect that Steelcase, being one
of the major manufacturers of office systems furniture, would require its dealers to meet several
conditions for the grant and continuation of a distributorship agreement. The imposition of minimum
standards concerning sales, marketing, finance and operations is nothing more than an exercise of
sound business practice to increase sales and maximize profits for the benefit of both Steelcase and
its distributors. For as long as these requirements do not impinge on a distributor’s independence,
then there is nothing wrong with placing reasonable expectations on them.57   (Emphasis and
underscoring supplied)
 
Verily, it was only reasonable for NPI — it being a local arm of one of the largest manufacturers of
foods and grocery
_______________

55  See Bernarte v. Philippine Basketball Association (PBA), 673 Phil. 384, 395; 657 SCRA 745, 756
(2011), citing Sonza v. ABS-CBN Broadcasting Corporation, G.R. No. 138051, June 10, 2004, 431 SCRA
583, 603-604.
56  686 Phil. 59; 670 SCRA 64 (2012).
57  Id., at pp. 69-70; pp. 76-77.
 
 
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products worldwide — to require its distributors, such as ODSI, to meet various conditions for the grant
and continuation of a distributorship agreement for as long as these conditions do not control the means
and methods on how ODSI does its distributorship business, as shown in this case. This is to ensure the
integrity and quality of the products which will ultimately fall into the hands of the end consumer.
Thus, the foregoing circumstances show that ODSI was not a labor only contractor of NPI; hence,
the latter cannot be deemed the true employer of respondents. As a consequence, NPI cannot be held
jointly and severally liable to ODSI’s monetary obligations towards respondents.
WHEREFORE, the petition is GRANTED. The Decision dated March 26, 2015 and the Resolution
dated September 17, 2015 of the Court of Appeals in C.A.-G.R. S.P. No. 132686 are
hereby REVERSED and SET ASIDE. Accordingly, the Decision dated May 30, 2013 and the Resolution
dated August 30, 2013 of the National Labor Relations Commission in LAC No. 02-000699-13/
NCR-03-04761-12 are MODIFIED, DELETING petitioner Nestlé Philippines, Inc.’s solidary liability
with Ocho de Septiembre, Inc. (ODSI) for the latter’s monetary obligations to respondents Benny A.
Puedan, Jr., Jayfer D. Limbo, Brodney N. Avila, Arthur C. Aquino, Ryan A. Miranda, Ronald R. Alave,
Johnny A. Dimaya, Marlon B. Delos Reyes, Angelito R. Cordova, Edgar S. Barruga, Camilo B. Cordova,
Jr., Jeffry B. Languisan, Edison U. Villapando, Jheirney S. Remolin, Mary Luz A. Macatalad, Jenalyn M.
Gamurot, Dennis G. Bawag, Raquel A. Abellera, and Ricandro G. Guatno, Jr.
SO ORDERED.
Sereno (CJ., Chairperson), Leonardo-De Castro, Del Castillo and Caguioa, JJ., concur.
Petition granted, judgment and resolution reversed and set aside.
 
 
259

Notes.—Administrative due process cannot be fully equated with due process in its strict judicial
sense — a formal or trial-type hearing is not required. (Office of the Court Administrator vs. Canque, 588
SCRA 226 [2009])
In labor disputes, grave abuse of discretion may be ascribed to the National Labor Relations
Commission (NLRC) when, inter alia, its findings and the conclusions reached thereby are not supported
by substantial evidence. (Ayungo vs. Beamko Shipmanagement Corporation, 717 SCRA 538 [2014])
 
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